China’s AI Champion Cambricon Predicts First-Ever Quarterly Profit
Beijing’s Ambitious Self-Sufficiency Drive Fuels Hopes for Local Chip Designer
China’s most valuable artificial intelligence company, Cambricon Technologies, is poised to make history by announcing its first-ever quarterly profit. This milestone is a significant boost to Beijing’s self-sufficiency drive, which aims to reduce reliance on foreign chip designers like Nvidia.
Market Capitalization Soars to 300 Billion Yuan
With a market capitalization of approximately 300 billion yuan (US$41 billion), Cambricon has seen its stock surge over 470% in the past 12 months. The company’s full-year loss in 2024 is expected to narrow to between 396 million yuan and 484 million yuan, indicating a net profit of 240 million yuan to 328 million yuan in the last quarter.
Revenue Forecast to Increase Nearly 70%
Cambricon’s revenues last year are forecast to increase nearly 70% to 1.2 billion yuan. The company’s Shanghai-listed shares closed at 695.96 yuan on Wednesday, a substantial rise from 120.80 yuan a year ago.
China’s Quest for Semiconductor Self-Sufficiency
China is striving for semiconductor self-sufficiency amid a tech war with the US. Founded in 2016 and listed on the Shanghai Stock Exchange’s Nasdaq-style Star Market since July 2020, Cambricon is one of China’s best hopes in developing home-grown graphics processing units.
Specializing in 7-Nanometre AI Chips
Cambricon specializes in developing 7-nanometre AI chips and has launched several processors, including the Cambricon-1A, which is used in products such as those from Huawei Technologies. Despite years of financial losses, Cambricon has become a darling for onshore Chinese stock investors.
Ranking First in Hurun’s China Artificial Intelligence Enterprises Top 50 List
Cambricon has been added to the SSE 50 Index, which tracks the 50 most valuable companies on the Shanghai Stock Exchange. The company’s valuation remains only a fraction of Nvidia’s US$3 trillion market cap, but it has drawn comparisons to the California-based juggernaut due to its focus on AI chips.
China’s AI Semiconductor Market Projected to Reach 178 Billion Yuan
China’s AI semiconductor market is projected to reach 178 billion yuan this year, according to Changjiang Securities. Domestic chipmakers are expected to benefit from “historic opportunities” driven by policies aimed at achieving semiconductor self-sufficiency.
ByteDance Invests in New Computing Centre
ByteDance, the parent company of TikTok and Douyin, is set to invest 4.5 billion yuan in a new computing centre in Datong city, Shanxi province, to boost computing power for its popular AI services.
US Regulations Limit Access to Advanced AI Technology
The administration of US President Joe Biden has unveiled new regulations designed to limit access to advanced AI technology to only American companies and businesses from allied countries, while excluding adversaries like China.
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